By Jon Street | Watchdog.org
PRICE OF POT: Could taxing weed be economic boon to Vermont?
WINOOSKI, Vt. — Looking through the purple haze, Vermont lawmakers see millions of dollars each year in additional tax revenues.
Progressive Party Sen. David Zuckerman introduced a bill in the Legislature earlier this month that would make it legal to possess up to two ounces of marijuana and three plants at any one time. The bill also proposes a $50-per-ounce tax on marijuana, which Zuckerman said will be “more than enough” to cover the cost of regulating the drug.
Under current law that took effect July 2013, it’s legal to possess only one ounce of marijuana. And the state doesn’t collect any taxes on the drug.
Zuckerman said that further legalization could provide the means necessary for providing treatment to those who are addicted to other drugs.
“And like I said, if there’s more revenue that we could then put toward treatment for those who are addicted to serious drugs then that would be a benefit,” Zuckerman told Vermont Watchdog.
Pot advocates are on board with Zuckerman’s bill, suggesting the additional revenues could be applied to future state budget gaps. Matt Simon, a legislative analyst at the Marijuana Policy Project, a Washington, D.C.-based marijuana advocacy organization, described to Vermont Watchdog just one of the benefits of Zuckerman’s bill.
“Vermont legislators are looking at budget shortfalls. They need revenue from somewhere and they look at marijuana prohibition as being a policy that’s costing the state a lot of money and harming the state’s economy.”
Simon said it makes “practical sense” to regulate and tax marijuana since it’s already part of an illicit market worth millions of dollars. However, Zuckerman said the amount by which the state could benefit economically remains to be seen.
According to the Substance Abuse and Mental Health Services Administration, an estimated 245,600 ounces of marijuana were consumed in Vermont in 2010, the most recent year for which data are available.
Under Zuckerman’s proposed $50-per-ounce wholesale tax, marijuana sales in 2010 would have generated anywhere from $7.3 million to $11 million that year. Factor in the state’s 6 percent sales tax and the state’s total revenue from marijuana sales in 2010 would have produced anywhere from $9.5 million to $14.3 million in 2010.
Zuckerman said his bill would also bring millions of dollars in savings to the state. According to the American Civil Liberties Union, Vermont spent $8.2 million in 2010 to enforce marijuana laws. While a portion of the revenue from legal sales would be applied toward enforcing new regulations, Zuckerman said that’s nowhere close to what the state currently spends on enforcing current law.
“I think certainly we would have to review what overseeing it and regulating it would cost, but given the quantity of marijuana that is already bought and consumed in Vermont I would have to imagine $50 per ounce would generate more than enough to cover the regulatory costs to run such a program,” Zuckerman said.
Simon added that by taxing marijuana by the ounce instead of a flat percentage of the total sale amount, revenue projections are likely to be more accurate.
“It’s rather different from Colorado and Washington‘s taxes, which are percentage based,” he said. “So the idea of having a per ounce tax — there are advantages of doing that such that it would be a more predictable revenue estimate from a per ounce wholesale tax.”
If prices go down, Simon explained, then a percentage tax might not produce the projected revenue whereas a per-ounce wholesale tax would be a more consistent estimate.
Contact Jon Street at firstname.lastname@example.org and find him on Twitter @JonStreet.
The post The price of pot: VT lawmaker says marijuana tax could be economic boon appeared first on Watchdog.org.